I elected to have 20% of the Roth conversion withheld for taxes. I received two 1099-R forms. One for the 80% and another for the 20%. That 1099-R form is showing the whole amount is taxable and they code listed is "1", which is labeled as "Early distribution, no known exception (in most cases, under age 59 1/2)". TurboTax is telling my I owe the 10% penalty as well.
I don't know why the code is a 1 because it wasn't a distribution to me it was the amount I designated to be withheld for the taxes.
